Natural gas futures traded lower on August 9 as participants increased their short position as seen by the open interest. The gas price had surged 4.87 percent last week on the MCX.
The energy commodity turned red after a gap-up start in the afternoon session, despite a positive global trend.
On the MCX, natural gas delivery for August fell Rs 1.10, or 0.35 percent, to Rs 308.80 per mmBtu at 14:37 hours with a business turnover of 14,900 lots.
Gas delivery for September declined Rs 1.50, or 0.48 percent, to Rs 310.00 per mmBtu with a business volume of 3,551 lots.
The value of August and September's contracts traded so far is Rs 625.05 crore and Rs 89.95 crore, respectively.
MCX iCOMDEX Natural Gas Index decreased 13.45 points or 0.36 percent to 3,773.93.
NS Ramaswamy, Head of Commodities, Ventura Securities said, “As per our last week’s view, MCX NATURAL GAS prices traded positive for the entire week. We expect the uptrend to continue further. Prices may head towards Rs 350 level in coming sessions. Any dip in the prices can be used as an opportunity to create a long position in the counter.”
He advised his clients to buy MCX NATURAL GAS AUG in the range of Rs 300-305 for the target of Rs 330-350 with a stop loss below Rs 280.
Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International natural gas futures have started firm this Monday morning and early afternoon in Asian trade. Technically, NYMEX Natural Gas could trade in a range of $4.000-$4.250 levels.”
On the domestic front, MCX Natural Gas August holds strong support near Rs 307-Rs 304 levels. Resistance is at Rs 313- 317 levels”, Iyer noted.
As per US CFTC data, natural gas speculators cut their net long US futures and options positions by 12,276 contracts to 311,728 for the week to August 3.
In its weekly report, Baker Hughes said the number of rigs drilling natural gas in the US was unchanged at 103 rigs for the week to August 6.
The weather is expected to be much warmer than normal over the next 6-10 days, especially in the North East.
Technicals
The commodity has been trading higher than 5, 20, 50, 100 and 200 days' simple moving averages and exponential moving averages on the daily chart. The momentum indicator RSI is at 67.62, which suggests upbeat movement in the price.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited, “Natural gas has been trading sideways to moderately bullish note with the support of 15-SMA of hourly chart placed near Rs 307.50. The price has formed a W-chart pattern on an intraday chart. The neckline resistance would be near Rs 312 and if price breaks above this level, we may expect a move towards Rs 315.50-317.”
At 09:22 GMT, the natural gas price was marginally up 0.17 percent at $4.14 per mmBtu in New York.
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